04.09.2014Troika/Austerity
Policies
The
ECB conducts in fact not only monetary policy, but also economic policy (for
which it has no mandate) when it demands from governments „fiscal
consolidation“ and „structural reforms“ – and that in a neoliberal sense,
because it follows the rationality of privatization, social spending and wage
cuts – with the general effect to preserve the „one percent's“ interests; their
wealth, incomes and power positions. Much of it the ECB does in context of a
global, ex-Eurozone competition – which has its own logic with the aim of
keeping long-term competitiveness for the Eurozone.
However,
these policies find themselves in a global downward spiral for the lowest
social, ecological and wage standards. This policy doesn't find a solution for
not only the Eurozone, but also globally, on how to stop this downward spiral,
which leads to further depreciation of social and ecological standards, thus
leading to ever more destruction of the social balance and the environment
worldwide. In that sense, the ECB is acting in accordance to neoliberal
anti-social and anti-environmental thinking and policies. It became most
evident in the Troika-policies, which led to destructive social developments in
many European countries.Increasing global
indebtedness and central bank liquidity flooding
It
was not necessarily the ECB which started the expansionist monetary policy
after the outbreak of the biggest financial crisis after the 1930s. But sooner
or later also the Eurozone will have to devalue its currency in one way or the
other, concerning exchange rates, in order to support its internationalized
real economy.
Thus,
it follows a methodology of many central banks and governments: to monetarize
its debt by printing new cheap money. And those who benefit from that are the
money-creating institutions – banks: another way for them to increase capital
and counter their bad assets in their balance sheets.
You
all know that this long-term low interest money printing will be a source of
the next financial crisis; of the next asset price bubble. And who would deny
that we already have price appreciations, not only in stock, but also in many
commodity and real estate markets, which have already a negative social impact.
Even the Bank of International Settlement (BIS) has pointed to this issue.
And
instead of trying to raise further growth potentials – for which there are ever
less human and natural resources on this planet that can be exploited without
destroying the global social and natural basis completely (especiall not with
neoliberal policies) – one should think about a massive global-scaled debt and
wealth cut!
It
would be sure a huge task to balance out all or most global debts and claims –
but is it impossible? And what, if you don’t do this? Keep going on the way it
is? Exploiting and destroying more and more of the planet’s life – even by
another world war? Are there crazy people hoping to write-off all foreign debt
and raise new growth potentials after a destructive war? If there are such
people, they must be stopped under all circumstances. It is also you, your
family, friends and children who will suffer from that. You would never want
that.
Think
about how to technically balance and cancel out most or even all the global
debt and claims in a way that a just social balance can be regained within
societies and amongst all planetary societies. Think also about if after that,
we want to reset the same old capitalist monetary system, where money is
primarily created as interest-bearing debt out of thin air by private banks,
giving them their comparatively large power and „systemic relevancy“.
Aren’t
there much better alternatives how to run an economy to meet the needs of the
people and a sustainable environment? There are many alternative economic
models out there, which guarantee much more social balance amongst people,
ecologic sustainability and freedom of the individual.Fiat-Money creation
of private banks, role of central banks and alternatives to that
The
EOCB and Occupy groups elsewhere have criticized the Fiat-money creation
systematic by banks and the problem, that all the money (the standard currency)
is issued as interest-bearing debt. (At this point it should be made clear once
and for all that money/credits are not lent-out deposits, as it is widely
believed – in fact, the fiat-created loans become deposits when transferred
onto a bank account.) The almost unlimited money printing (reserve ratio of
just 1% in the Eurozone) and leveraging practices enable banks to expand their
balance sheets almost limitless, so that they become unreasonably huge in
comparison to real economy enterprises, governmental budgets or state finances
in general.
It
is immoral to create money out of nothing and lending it out as it had been
„earned“ with effort-giving by the banks, when in fact just some numbers were
typed into a computer, then demanding relatively high interests on it, and in
case the credit cannot be paid-back giving the banks the right to seize one's
property. It is especially immoral and contradictory from a
democracy-regulative point of view. Private banks are not democratically
legitimized or controlled and are not oriented for the common welfare, but for
private shareholders' profits – and they had been allowed to become so large,
uncontrollable, diminishing the power of political institutions.
Why
do these entities have such a fraudulent privilege. Printing money out of
nothing, putting it into circulation and earn the seigniorage is – if not done
by banks – a crime. Why do banks have such a huge source of power in our
societies. Not even the states, the governments have these privileges. Besides
problems that governments are not free from lobby corruption, you could at
least argue that they are societal institutions, which are somewhat
democratically legitimized and which have the legislative power – the primacy
of politics – and that they should act in a way to limit this regulative,
systemic power of banks.
It
would be even in the interest of governments, if they would regulate the
monetary system in a way that stops the Fiat-money creation of banks and
reduces their relative power and enables the states (not necessarily the
state's executive branch; the government) to issue money in a way, where there is
no need to pay interest to private investors – and thus cancel out also the
debt-burden, which arises out of the need that states need to pay interest when
printing money via government bonds issuance. This would also solve in the long
run the whole problem of sovereign debt and its increases.
There
are already many alternative currency models discussed not only in protest
movements, but also in political, regulative and scientific forums. On the
state level, a concept of a full-reserve money model should solve many of the
above mentioned problems. And an alternative state currency model must also
change the role of a central bank. The central bank could be the sole
money-creating institution. It could bring new money into circulation not via
banks, but by itself or sub-branches, through public investments via
governments, or even by per-capita grants (not loans) – and that with
practically no interest.
The
benefits would be: better inflation/deflation control by the central bank
(since it controls all the circulating money); preventing extreme
credit-cycles/volatility and thus financial crisis; lower interest rate levels
– thus less economic growth and profit requirements; elimination of the
„systemic relevancy“, the inappropriately large power banks; a great solution
to the sovereign/public debts and their increases; a return of power to
political institutions (governments) which are formally much better
democratically legitimized than banks; more public money for social and
environmental issues.
This
suggestion has been made by the EOCB already almost three years ago. For
further references please check for instance initiatives, papers and concepts
like/of:
ü
IMF working
paper („The Chicago Plan revisited“)
ü
Monetative.de
ü
Vollgeld.de
ü
Positivemoney.org
ü
Thomas Mayer
(former Deutsche Bank chief economist, now professor at Goethe-University,
lectures under „Order of Money“)
ü
Geldhahn-zu.de
ü
EOCB
ü
Vollgeld.chAlternatives for the
common people
This
above suggestion is just one in context of „revolutionary“ alternatives. They
accept the role of institutions like central banks, governments and even banks.
However, if these institutions and the legislator is unable to conduct a reform
process that eliminates (besides other issues) the worst aspects of the
monetary and banking systems, then the people are called up to conduct by their
own societal changes, that leads to better; more socially balanced and
environmentally sustainable socio-economic structures.
In
fact, despite of many of such existing alternative economic models and their
propagation, political and economic elites are unwilling to raise up these
issues, because of whatever reasons – may it because of ignorance and
unwillingness to understand that humanity is in desperate need to implement a
post-capitalist economy, or may it be that the elite power institutions are
corrupted that much, that they want to preserve their power and do not want to
step into such a process.
The
alternative models are based less or not on national/state level, but more on a
local-regional level; ones that do not include existing political and economic
institutions, but institutions and structures that would be set up by the
people, who have stepped into a progressive revolutionary process „bottom-up“,
by themselves.
These
include models of barter trades; local-regional currencies that may have a
demurrage and no interest rates; sectoral currencies that do not need money;
open-source economy principles that reduces technology-suppressing patents and
current paradigms of private property; agricultural and communal living models,
that allow condition-free food and housing minimum standards,
environmentally-friendly agriculture and manufacturing methods and a social
environment that fosters the development of the individual's creativity, social
participation, freedom and means to pursue happiness.
These
models are oriented alongside principles of sufficiency (especially in regard
of environmental aspects) and aims a maximum grade of subsistence – in order to
become free of large governmental and corporate driven social and environmental
exploiting structures, and make them as much as possible obsolete.Message to the „1%“
This
process, governments and corporations may try to prevent or even destroy in one
way or the other, but they will not succeed in that in the long run. First of
all, they have no moral arguments on their side, since they are in effect the
responsible institutions for world-wide social and environmental deprivation
and destruction. Secondly, they would need to impose ever more authoritative
and fascist-like policies to prevent such an „uprising“ of the people. Who can
agree to that from a humanistic point of view. And what do they – the people
who run these institutions – win in the end: a socially and environmentally
destroyed planet in which even they and their children cannot live a human
life.
The
message to them would be: Even you, the „1%“, cooperate in transforming the
planet to a better, a human place for us all, the „100%“ – or we, the „99%“,
will conduct the change without you. And you are always invited to join us in
that process, because we also want a better world for you – it is in the end
also in your interest. And with your cooperation we foster this transformation
quicker than if you unnecessarily fight us.
Don't
believe that letting loose your power grip and material wealth will deprive you
from the meaning of your life. It is the opposite: joining the people on basis
of human solidarity, justice and mental freedom from materialism will give you
human freedom in the broadest sense and the positive recognition from the
people. And you will be assured that also your children will have a human
future on our planet. You'll be living much happier with that.
You,
who read this – you are not primarily the functional role of your profession or
company etc., but a human being and part of our world society. Change your
priority of what is important in what you think and do: Think of the planet and
the people first – it is much more important than what your boss, company, government
wants from you. And try start to believe in the people's ability of
forgiveness, friendship and universal love.